With gas prices surging as the war in Iran enters its third month, one Canadian oil and gas expert is warning the conflict has led to the “worst energy crisis that anybody alive has ever seen.”
Eric Nuttall, a partner and senior portfolio manager at the Toronto-based Ninepoint Partners which runs the largest energy fund in Canada, says the world has lost hundreds of millions of barrels of oil supply since the Straight of Hormuz shut down in late February when the war began.
“We have forfeited about 700 million barrels to date,” Nuttall told CTV News. “Even if the Strait were to open up tomorrow, we would lose 1.5 billion barrels at a minimum of forfeited production as a massive, massive, gaping hole.”
About a fifth of all the world’soil supply is transported through the Strait.
Since the war began, Nuttall said Middle Eastern oil production has dipped between 12 to 14 million barrels per day.
One way to reduce demand for oil is by government policy enact work from home orders, like those that have been adopted by governments in South Korea and Singapore, he said.
Different areas are more impacted by the oil crisis than others, Nuttall said.
“In Canada, we’ll have access to product — we’re just going to have to pay for it.
“What we’re seeing is there’s a battle for physical barrels.”
He explained Australia could be looking to adopt these measures since it has minimal domestic refining capacity.
Canada, meanwhile, wouldn’t have to worry since it has access to oil.
He also said the price of oil will need to rise enough to rationalize demand — something that’s expected to come in the coming days or weeks.
His estimate for West Texas Intermediate, which closed Monday at over $106 USD a barrel, could surge to over $170 in the short term.
That’s a huge imbalance that’s only getting bigger as safety buffers such as the Strategic Petroleum Reserve and onshore inventories are depleted.
“Quite simply put, oil needs to get too expensive for many people on planet Earth to use over the short term,” he said.
Meanwhile, as Nuttall calls for higher oil prices to offset a global shortage, experts in Alberta say now is the time to prioritize energy projects over emissions reduction initiatives, including the Oil Sands Pathways to Net Zero Alliance project.
“The world has changed,” said Martha Hall Findlay, director of the University of Calgary’s School of Public Policy.
“Countries around the world are now way more focused on energy security, energy affordability, accessibility.”
Alberta and federal government agreed on a memorandum of understanding (MOU) in November 2025 that would see the advancement of energy projects while aligning with emissions goals.
But Findlay says the project would cost upwards of $20 billion and would only reduce emissions by 0.02 per cent.
The project also would not generate revenue, she added.
In a news release, the Oil Sands Alliance, which consists of major producers, blamed Canada’s complex regulatory processes and uncompetitive carbon frameworks on the lagging progress.
“Unfortunately, while both governments have taken steps toward this critical national interest objective since signing the MOU, the pace of change has been slow, and we are at risk of letting this opportunity pass Canada by,” the group said.
Alberta’s minister of energy and minerals said the negotiations with Ottawa and Pathways project are still ongoing.
“We remain committed to getting a good deal for Albertans, and any agreement must keep Alberta’s energy and industrial sectors competitive and thriving on the global stage,” Brian Jean wrote in a statement to CTV News.
Meanwhile, a spokesperson for the federal minister of energy and natural resources says the Ottawa is still invested in reducing emissions as a “moral imperative” and a “massive economic opportunity.”
“The Pathways project will be the largest carbon capture and storage project in the world and will deliver emissions reductions equivalent to taking more than 4.75 million cars off the road each year,” Tim Hodgson’s press secretary Charlotte Power wrote in a statement.
“(It will) also generate significant economic benefits including approximately $16.5 billion in GDP, $12.2 billion in labour income, and between 18,500 and 43,000 jobs annually.”
